LONDON – The UK competition regulator announced on Thursday that Facebook
acquisition of popular GIF website Giphy raises competition concerns.
The Competition and Markets Authority said it’d made a preliminary discovering that Facebook’s purchase of Giphy would harm competition between social media marketing platforms and eliminate a potential rival in the display advertising market.
The CMA said it could require Facebook to unwind the offer, reported to be worth $400 million, and sell Giphy if its competition concerns are ultimately confirmed.
It is the most recent sign that Britain’s regulator is unhappy with the energy of Silicon Valley tech giants and is really a rare example of an overseas regulator seeking to seal a package involving two US firms. Cma Facebook Gifsramachandranvariety
Millions of GIFs are shared on social networks like Twitter, Snapchat and TikTok, in addition to via email and text messages. Most social media marketing platforms count on access to Giphy’s GIF database, while some also originate from Google’s Tenor.
Facebook’s ownership of Giphy could lead to it denying other platforms access to its GIFs, the CMA said.
He added that any lowering of the quality or selection of GIFs would have a direct effect on what people use social media marketing sites and whether or not they switch to another platform, such as for example Facebook, which already has significant market power.
Facebook’s platforms – Facebook, WhatsApp and Instagram – already account for a lot more than 70% of that time period people invest in social networks, according to CMA analysis. Cma Facebook Gifsramachandranvariety
Stuart McIntosh, chairman of the independent investigative group conducting the most recent phase of the probe, said in a record that Facebook could pull GIFs from rival platforms or ask users handy over more data to gain access to them.
McIntosh said the offer also removes a “potential challenger” to Facebook in the £5.5 billion display advertising market.
” If we conclude that the merger harms the marketplace and social media marketing users, we will need the necessary measures to ensure people are protected.”
Facebook and Giphy are headquartered in the US, but the CMA can investigate mergers when the acquired business comes with an annual turnover of at the very least £70 million ($88 million), or when the combined businesses have at the very least a 25% share of any “reasonable” market. Cma Facebook Gifsramachandranvariety
A Facebook spokesperson told CNBC that the business disagrees with the CMA’s preliminary findings.
At the time of the acquisition, Facebook said it planned to help integrate Giphy to the Instagram app “so people can find the right method to express themselves.”
Facebook has previously tried to play down claims that the offer could reduce competition.
The CMA is inviting stakeholders to touch upon its preliminary findings before publishing its final report on 6 October.
